Future Fundraising Now

Watchdogs: please don’t tell us how to raise funds

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by

Jeff Brooks
in

It seems the charity watchdogs have some new bad advice for fundraisers.

GuideStar, the BBB Wise Giving Alliance, and Charity Navigator are telling us what we shouldn’t say in fundraising: Nonprofits: Ban These Phrases from Your Vocabulary.

The phrases they’d like us to ban:


  • “Only X% of your gift goes to overhead.”
  • “Only X cents on the dollar go to overhead costs.”

It’s almost refreshing, really. After years of beating the overhead drum and successfully training donors to look at overhead percentage as a measure of charity deservingness — they’ve finally seen the light and changed their minds.

Which is good. But their belief that we should also ignore the overhead issue is just not connected to the reality we work in. You see, they’d like us to stop bragging about low overhead (those who have it to brag about) and instead educate our donors about how bogus overhead is as a way of understanding a nonprofit.

You know how well “educating donors” goes when you try it in fundraising, don’t you? It’s about as effective a way of motivating the to give as insulting donors would be.

So if you have a low overhead ratio, keep on talking about. A lot of donors still care about it. They shouldn’t, but they do. And you can’t afford to highjack your fundraising to help undo the past sins of the watchdogs.

It’s going to take a long time to correct the damage the watchdogs did. (Journalists are still very much on the overhead beat, with their misleading exposes and warnings.)

We should be thankful that the watchdogs are watching more intelligently now. But we have to live in the atmosphere they helped create. Until donors stop caring about overhead, we need to supply them with the information they want.

    Comments

    4 responses to “Watchdogs: please don’t tell us how to raise funds”

    1. claire axelrad Avatar
      claire axelrad

      I respectfully disagree. Yes, people still care about this. But it’s because we, and the watchdogs, have taught them to look at overhead as the ultimate measure of effectiveness. Nonprofits must stop buying into and promoting this overhead myth.
      As I wrote in my recent post – http://www.clairification.com/2014/11/16/works-doesnt-nonprofit-email-appeals/ – “While exorbitant, unnecessary spending is wasteful, the same cannot be said for extra spending that helps more people at a somewhat more expensive ratio. Would you not spend 3 cents on the dollar to cure cancer if 2 cents on the dollar couldn’t yield that result? Of course you would!
      It’s going to take a concerted effort on the part of nonprofits to overcome years and years of pounding the overhead myth into people’s heads. Sadly, 62% of the American public now believes nonprofits spend too much on overhead. So a new charity that needs to spend 30 – 35% to develop programs and ramp up services starts out in a hole that’s very difficult to dig out of — regardless of the fact that they may be saving lives, restoring the environment or doing all sorts of beneficial things that really couldn’t be done for less expense. Even established nonprofits have this problem. Everyone needs to spend enough to get the job done. If you don’t have enough, you may as well have nothing. The Stanford Social Innovation Review calls this phenomenon The Nonprofit Starvation Cycle. ”

    2. claire axelrad Avatar
      claire axelrad

      I respectfully disagree. Yes, people still care about this. But it’s because we, and the watchdogs, have taught them to look at overhead as the ultimate measure of effectiveness. Nonprofits must stop buying into and promoting this overhead myth.
      As I wrote in my recent post – http://www.clairification.com/2014/11/16/works-doesnt-nonprofit-email-appeals/ – “While exorbitant, unnecessary spending is wasteful, the same cannot be said for extra spending that helps more people at a somewhat more expensive ratio. Would you not spend 3 cents on the dollar to cure cancer if 2 cents on the dollar couldn’t yield that result? Of course you would!
      It’s going to take a concerted effort on the part of nonprofits to overcome years and years of pounding the overhead myth into people’s heads. Sadly, 62% of the American public now believes nonprofits spend too much on overhead. So a new charity that needs to spend 30 – 35% to develop programs and ramp up services starts out in a hole that’s very difficult to dig out of — regardless of the fact that they may be saving lives, restoring the environment or doing all sorts of beneficial things that really couldn’t be done for less expense. Even established nonprofits have this problem. Everyone needs to spend enough to get the job done. If you don’t have enough, you may as well have nothing. The Stanford Social Innovation Review calls this phenomenon The Nonprofit Starvation Cycle. ”

    3. Larissa Avatar
      Larissa

      It’s ironic that it is now the Charity watchdogs calling for us to overhaul the overhead conversation. I do appreciate what they are doing (while still agreeing with Jeff that overhead is important). However, I think a letter of apology (or at least shared culpability) would be more in order than a letter to nonprofits saying “we need your help to change this myth” – as if the nonprofits have been the problem all along.

    4. Larissa Avatar
      Larissa

      It’s ironic that it is now the Charity watchdogs calling for us to overhaul the overhead conversation. I do appreciate what they are doing (while still agreeing with Jeff that overhead is important). However, I think a letter of apology (or at least shared culpability) would be more in order than a letter to nonprofits saying “we need your help to change this myth” – as if the nonprofits have been the problem all along.

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    The future of fundraising is not about social media, online video, or SEM. It’s not about any technology, medium, or technique. It’s about donors. If you need to raise funds from donors, you need to study them, respect them, and build everything you do around them. And the future? It’s already here. More.

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    Jeff BrooksJeff Brooks has been serving the nonprofit community for more than 35 years and blogging about it since 2005. He considers fundraising the most noble of pursuits and hopes you’ll join him in that opinion. You can reach him at jeff [at] jeff-brooks [dot] com. More.

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    The future of fundraising is not about social media, online video, or SEM. It’s not about any technology, medium, or technique. It’s about donors. If you need to raise funds from donors, you need to study them, respect them, and build everything you do around them. And the future? It’s already here. More.

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    About the blogger

    Jeff Brooks has been serving the nonprofit community for more than 30 years and blogging about it since 2005. He considers fundraising the most noble of pursuits and hopes you’ll join him in that opinion. You can reach him at jeff [at] jeff-brooks [dot] com.